I am a media veteran and China public policy specialist. I was an English Anchor for China Central Television (CCTV) International from 2002-2005, presenting Chinese political and economic events with fresh perspectives to a global audience, and interviewing world business leaders for their insights on doing business in China. My major Newscasts included live coverage of the 2003 Iraq war, the SARS epidemic, the first round of Six Party Talks, and the launch of China’s first manned spacecraft Shenzhou 5, etc. In 2006, I was at CNN Washington Bureau. Since 2007, I have held important roles in think tanks promoting U.S.-China Relations in New York City and advised several financial institutions on the interface of business and government. Most recent years, I was a Senior Research Associate for China Public Policy at Harvard University, where I developed case studies through first hand interviews to bring insights into public policy making in China. Research also focused on policies regarding Chinese investment in the U.S.. This year I founded Innovation Ideas Institute with other Harvard scholars, a think tank that aims to foster innovation in China.

Jobs From China? An Estimated 1 Million U.S. Jobs Supported By 2020

In President Obama’s State of the Union address this year, he proclaimed that for the first time in over a decade America had become the No. 1 destination for investment, overtaking China. Rising levels of investment from China are becoming more prominent, from the high profile mergers and acquisitions to small investments spreading out to most states of the U.S.

Although China’s inward FDI has stagnated under the burden of rising costs (property and wages) and fierce local competition in recent years, the country’s outward direct investment (ODI for short) is being fueled by its huge foreign reserves, demand for new investment opportunities and the desire to tap into new markets.

Chinese investors can see lots of reasons to put money to work in the U.S. A relatively young population and skilled workforce, advanced technology and world-class innovative capabilities are particularly attractive to Chinese companies seeking to scale the value chain. Deep capital markets with big consumer and producer markets are some of the other factors that few other destinations can match. The U.S. also offers a mature and transparent legal system, and business practices with international standards that helps to boost the confidence of Chinese investors. The fact that the U.S. is the biggest recipient of Chinese international students also potentially helps focus the country’s investors on the U.S., as students and their families learn more about the opportunities there.

What will all this Chinese investment mean for the employment outlook? Shuanghui-owned Smithfield has 46,000 total employees in the U.S. since last year; Wanda-owned AMC Theaters employs 18,500 people; Huawei, the Chinese telecoms giant, has direct employment of 2,000 in the U.S., and supports tens of thousands of jobs through its $6 billion procurement orders, goods and services from U.S.-based high tech firms; Wanxiang, an automotive parts manufacturer, supports more than 3,000 jobs.

A rough calculation and projection with professor Richard Freeman, the leading labor economist from Harvard University, helps to illustrate the potential impact. China’s GDP will likely exceed $20 trillion by 2020. According to the Rhodium Group, the country currently has an ODI-to-GDP ratio of 5%, which translates to $100 billion of ODI in 2020. If ODI over GDP continues rising to 10%, which seems reasonable, Chinese ODI would reach $2 trillion by 2020. The U.S. currently receives only about 2% of China’s ODI, but if that were to rise to 15% (which is the U.S. share of global ODI), then by 2020, the U.S. could receive around $300 billion in investments from China.

Using the 2011 Federal Reserve Bank of St Louis estimate of capital stock and 2011 U.S. civilian employment of 140 million people, the $300 billion capital investment would create 1 million jobs by 2020. This means that 1 million American workers would be employed by Chinese owned firms. This assumes that China will continue its “Go out” policy, and the U.S. keeps the door open to global FDI.

The estimates of capital stock are available here, and the employment data can be seen here.

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